Boosting India's EV Ecosystem

Developing EV programmes as a self-reliant industrial policy is underscored in the new budget with a strong emphasis on de-risking the supply chain

- ANUMITA ROYCHOWDHURY

Finance Minister Nirmala Sitharaman, in her speech on the Union Budget 2025-26, has underscored the need for localisation of electric vehicle (EV) manufacturing and raw material security for battery production. This signals a firmer policy thrust on industrial development and employment generation around EV production in India.

This can be an opportunity to join climate and clean air action with an industrial strategy to accelerate clean energy transition in the automotive sector. The budget proposal has further connected electrification with the upscaling of mass commuting modes of electric buses to maximise the energy and emissions-saving gains.

The cornerstones of the spending priority outlined in the Union budget are as follows:

Support and incentives for electric vehicle manufacturing with custom duty exemptions on 35 capital goods for EV battery manufacturing, and support for domestic manufacturing of motors, controllers and other critical components and integration of EV manufacturing with clean tech manufacturing programmes.

There is a committed budget for the PM-e-drive with a sizable allocation of Rs 4,000 crore to upscale electrification of the two-wheeler and heavy-duty vehicle segments.

PM e-Bus Sewa payment Security Mechanism for procurement and operations of e-buses by public transport authorities to upscale and sustain electric bus services during their service life to decarbonise mass commuting in cities.

There is continued support for the Production Linked Incentive (PLI) schemes for advanced chemistry cell manufacturing.